Page 10 - Downstream Monitor - MEA Week 37

DMEA refininG DMEA
Aramco completes deal to acquire Shell stake in SASREF
miDDle east
SAuDi Aramco revealed this week that it had completed a deal to acquire the 50% held by Royal Dutch Shell in the Saudi Aramco Shell Refinery (SASREF) for $631mn.
The deal was originally announced on April 21 and the Saudi firm said its completion had followed the receipt of all necessary regulatory consents.
The 305,000 barrel per day (bpd) facility is located in the eastern industrial city of Jubail, where Aramco is involved in numerous other downstream projects.
Aramco‘s senior vice-president of down- stream Abdulaziz Al-Judaimi said: “Saudi Ara- mco will take full ownership and integrate the refinery into its growing downstream portfolio. SASREF will continue to be a critical facility in our refining and chemicals business and we look forward to further optimising its performance and long-term viability.”
The move fits within Aramco’s aggressive downstream expansion strategy and adds 152,000 bpd to its existing 4.9mn bpd refining
capacity. SASREF’s output mainly consists of liq- uefied petroleum gas (LPG), naphtha, kerosene, diesel, fuel oil and sulphur.
The plant was commissioned in 1986, with Shell one of the original shareholders and Ara- mco taking a 50% stake only in 1993.
Shell downstream director John Abbott said: “SASREF has been a long and successful part- nership between Shell and Saudi Aramco. The refinery has operated with good reliability, and has an impressive safety record.”
in late 2017, the uS’ CB&i was awarded an engineering, procurement and construction management (EPCM) contract on a project to expand and modernise the facility.
CB&i was said to have completed conceptual studies and front-end engineering and design (FEED) work on the proposed new configura- tion. This would “give SASREF the operating flexibility needed to generate maximum returns through sustainable fuels production which meets Euro-V regulations”. No further details of the envisaged scope were disclosed.™
fUels
Fuel price pinch in East Africa
afriCa
KENYA this week raised fuel prices following a review by the governing authority, while ugan- dan fuel dealers began to stockpile in the wake of the Saudi production drop.
The Kenyan Energy and Petroleum Regu- latory Authority (EPRA) announced that the pricesforsuperpetrolanddieselwouldincrease by KES0.28 ($0.003) and KES2.44 ($0.02) per litre respectively, while the price for kerosene fell by KES3.31 ($0.04).
The prices of these fuels in Nairobi are now KES112.81 ($1.09), KES103.04 ($0.99) and KES100.64 ($0.97) respectively. Meanwhile, prices in the port of Mombasa have been set at KES110.19 ($1.06) for super, KES100.44 ($0.97) for diesel and KES98.03 ($0.94) for ker- osene, and those at Eldoret and Kisumu are set at KES113.30 ($1.09), KES103.74 ($1.00) and KES102.35 ($0.98) respectively.
Kenya’s consumption of refined oil products declined in 2018 by 6% to 5.92bn litres because of increased taxes and reduced economic activity.
The Petroleum institute of East Africa (PiEA) said that usage of oil products had dropped from 6.29bn litres in 2017 because of higher fuel taxation, reduced transport of cargo by road
and thermal generation decline because of the increasing availability of renewable energy to the grid.
“Equalisation of diesel and kerosene had impact in demand for kerosene. Heavy fuel oil decline relates to increase of wind and geother- malofpowerinjectedtothenationalgrid,”PiEA general manager Wanjiku Manyara.
She said that the transport of goods from Mombasa sea port by road to the capital Nairobi had declined as more cargo shifted to standard gauge railway (SGR), reducing the diesel used by trucks.
in September 2018, the government hiked the tax on kerosene by uS$0.18 per litre to put the price of paraffin on a par with diesel. The aim of the move was to deter profiteering by using kerosene as a substitute for diesel and gasoline, which Nairobi said leads to unpaid taxes, unfair competition and the deterioration of engine performance.
The Energy and Petroleum Regulatory Authority (EPRA) said that the amount of ker- osene leaving petroleum depots had reduced considerably since. “Studies had shown 70-75% of kerosene was going to fuel adulteration,” said
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w w w . N E W S B A S E . c o m Week 37 19•September•2019